Wednesday, October 5, 2011

District 9,10,11 rents fall first time in 4 years

High rents in the prime areas of district 9,10 and 11 have felt for the first time in 4 years. This is a real fall, not slower increase, which is usually called moderation here in Singapore:

"Housing rents in prime areas have dropped for the first time in nearly four years, as uncertainty in the global economy meant fewer executives are being hired, according to Jones Lang LaSalle (JLL).

The global property consultancy firm said average rents in Districts 9, 10 and 11 fell 1.4 percent in the third quarter from Q2, the first decline since Q1 2008.

The drop was worse in the high-end residential segment, where Q3 rental rates plunged 1.9 percent from last year. Many experts said fears regarding global economic uncertainty are starting to be felt in the country, with companies halting hiring or holding back on employment packages for existing staff."[1]

The prime area rents are usually above 6,000 SGD per month (no typo error) and almost exclusively within reach of foreigners with expat packages. According to the news, the below 6,000 SGD per month rents (a normal(!) rental range for not so prime condominium units) are still holding but since almost all segments of rental are foreigner dependent, they are very sensitive to economy.

In Singapore, majority of the tenants are foreigners since Singaporeans usually passes from their own flat from their parents flat without a period in which they rent a unit. Even if this means they stay with their parents until they are 30 or even after married. Thus, foreigners are the tenants here and anything effecting their inflow has direct effect on the rents.